Only a few years ago, Europe was a no-go zone for U.S. investors. The sovereign debt crisis, talk of a euro zone break-up, and a persistent recession with accompanying predictions of Japanese-style stagflation were enough to scare off the most intrepid investor. But times have changed.
From the Current Issue
At the spring meeting of Institutional Real Estate Americas’ editorial board, April 12–14 in Ojai, Calif., discussions highlighted the concerns and desires of our readership. The editorial board meets twice a year to discuss the issues members are losing sleep over.
June 23 is a date looming large in the diaries of U.K. voters. For only the second time since the 1970s, they will have the chance to vote on the United Kingdom’s position in the European Union. With a potentially large negative impact in the short to medium term, the potential for Brexit is weighing on business activity.
The investment committee of the California Public Employees’ Retirement System has approved the pension plan’s 2016 Real Assets Strategic Plan. Paul Mouchakkaa, managing investment director with CalPERS, recently spoke with Institutional Real Estate Americas about the new strategic plan.
The downward trend in quarterly NCREIF Property Index total returns continued in first quarter 2016. With $490.8 billion of market value, the quarterly NPI total return was 2.21 percent, consisting of a 1.17 percent income return and 1.04 percent appreciation.
Most investors prize transparency in their relationships. It’s now possible, through systems developed by software vendors, to streamline the business processes involved in acquiring, financing, managing and disposing of real property holdings.
The U.S. Supreme Court opened the door for a new form of exaction from property owners and real estate developers by refusing to hear an appeal of a decision by the California Supreme Court that upheld San Jose’s inclusionary zoning ordinance.
Dallas had the third most active property sales market in 2015, according to RCA’s “Top 40 Markets of 2015,” with a total of more than $19.5 billion in sales volume, a 25 percent year-over-year change.
Global real estate transaction volumes fell in first quarter 2016 on weaker market sentiment, according to JLL’s preliminary data on global capital flows. Some regions did experience growth, however, with expectations for 2016 activity to stay broadly in line with 2015.
With the collapse in oil prices over the past year, Houston is continuing its divergence from the broader U.S. property market, and a recently announced REIT merger is making that split plain.
Some investors are increasing their allocations to real estate. The Regents of the University of California have increased the target allocation to real estate for the university system’s $3.2 billion Retirement Plan and $516 million General Endowment Pool.
Sublease space in tech-oriented real estate markets is increasing, and oversupply of sublease space has preceded market downturns in the past.
A total of 47 new investment funds were launched during first quarter 2016, the highest number of funds launched since first quarter 2014, which saw 48 new funds. As a group, they are seeking to raise approximately $56 billion.